Train or plane for short trips?
"Because of price or environmental awareness, it may be a bit of everything, but high speed is in fashion." This was stated by the Secretary of State for Transport, Isabel Pardo de Vera, a few days ago in Congress due to the fact that train users have multiplied since the sector was opened to competition and on the tracks that previously only Renfe trains passed through. Other companies began to circulate, encouraging more travelers due to the flexibility of more schedules and, above all, the fall in prices.
There are now destinations for which the customer has up to four options to choose from: AVE, Avlo, Ouigo and Iryo. The first two operated by Renfe and the other two are the ones that have landed in Spain after the liberalization of the railway sector.
The great advantage for the customer: lower prices. Since Ouigo entered the high-speed market in May 2021 on the Madrid-Barcelona route, tickets have fallen by an average of 49% compared to pre-pandemic data, according to a report by the Trainline platform. And everything points to the same thing happening with the destinations that are opening up to new operators. All of them are already operating from Madrid to Valencia except for Iryo, which will not take long and this destination opens in December.
This fall in prices has had a direct impact on demand and the sale of tickets on the Madrid-Barcelona route has shot up 390% since the summer of 2021. Between Madrid and Alicante there has been 110% more demand, 80% more more on the trains to Malaga and 60% more to Seville. High-speed train traffic in August was 4% higher than that registered in the same month of 2019, before the pandemic broke out, according to data from Adif. It is the first time that the figures improve on those prior to covid and the entry of new operators that have lowered prices has a lot to do with it.
The monopoly is over Renfe is the most affected. The company has gone from being a monopoly to having to share the same space with two new companies and, furthermore, with Avlo, AVE's little brother. Manel Villalante, general director of Development and Strategy of Renfe, explains to this newspaper that at the time of liberalization his objective was "to continue being the best when they were not the only ones". In his opinion, before they only competed with the plane, and now they have to do it with other modes of transport but also with other trains.
The success of rail liberalization, Villalante points out, is not that there are more trains in Spain, but that there are more people who go by train. "If we manage to make the network more widely used and prices more adaptable to different formulas and types of clients, much better," he says. The goal is to make the network more efficient, which is the largest in Europe and the second in the world, only behind China. For example, the Spanish network has 20% more kilometers than France, but a third of passengers.
The most ecological environment
Its first major competitor, Ouigo, a subsidiary of the French public company SNCF, thinks the same. Its general director, Hélène Valenzuela, considers that until now high speed was an "elitist" product reserved for a minority that could afford to travel by train. In an interview granted to this newspaper, Valenzuela assures that the entry of Ouigo in the market has "dynamited the prices of high speed" allowing access to more clients and getting people out of the plane and out of the car. She states that her "great rival is not Renfe, but the most polluting means of transport". According to her calculations, traveling by train is 80 times less polluted than by plane and 50 times less than by car.
His great claim to the administrations is the reduction of the fees that the operators have to pay. From Ouigo they point out that if during their first three years of life they had less taxes, they could offer better prices to customers and that would result in greater use of the train, which would benefit not only the environment but also society due to the decrease in number of road accidents.
They are not the only ones that compete with Renfe. In less than a month, Iryo, the consortium made up of AirNostrum, Globalvia and Trenitalia, will enter the market, which will start rolling between Madrid and Barcelona from November 25 and will arrive in Valencia a week later. In addition, in the first quarter of 2023 they promise to arrive in Andalusia, becoming the first to offer 'low cost' tickets to this area of the country and compete directly with the AVE.
Its Product Director, Óscar Santamaría, reveals that its objective is to attract 8 million passengers in 2025. Until then, he trusts that the liberalization of the market will make it more competitive and criticizes that the Spanish network is "underused".
In addition to competing on price -the company has already put tickets on sale for the whole of next year to all the destinations it will open-, its intention is to offer a personalized service with four rates, the possibility of changing times and dates, in addition to menus on board prepared at the moment and that it prepares under its own Haizea brand.
An eye on the northern corridors
For now, the companies have embarked on the most profitable routes so far: Madrid-Barcelona, Madrid-Valencia and routes to Andalusia. But the interest in competing with Renfe in other corridors is especially strong in the case of Galicia. The Secretary of State for Transport, Isabel Pardo de Vera, has stated on more than one occasion that "where there is still no competition, there will be", making it clear that the connection between Madrid and Galicia is one of the objectives. Renfe is already working on the Avlo line that will link Madrid with Orense. Its high-speed 'low cost' train will arrive in Galicia during the year 2023, although they do not give specific dates yet. His competitor will be Iryo, who has already stated that they are very attentive to the northern corridor, although the deadline is until 2026.